Excelsior Correspondent
SRINAGAR, Sept 9: High Court today directed the Government and J&K Bank to file their reply to the plea seeking waiving of interest on loan amounts by different banks on account of outbreak of COVID-19.
Senior Advocate Jehangir Iqbal Ganaie with Sheikh Umar Farooq contended before the division bench of Justice Ali Mohammad Magrey and Justice Sanjay Dhar that the instant PIL has been filed for the benefit of people of J&K and Ladakh.
It is submitted that people of both UTs have availed loan facilities from different banks, but, on account of the prevailing lockdown announced by the Government in view of outbreak of COVID-19 pandemic, are not in a position to pay the due installments including the interest charged on loan amounts.
The DB said that when the PIL was considered on July 2, the Court while issuing notice sought response of the other side and notice was waived by Government counsel on behalf of J&K. The notice was also waived by bank counsel and notice was issued to officials of Government of India for filing of response.
The advocates appearing on behalf of J&K Government, Government of India and J&K Bank in the matter sought time for filing of response which the court granted with three weeks.
A direction is being sought from the court in the name of Authorities of J&K Government, Government of India and J&K Bank for waiving of interest charged by the banks on the term loans during the period of lockdown as announced by the Government.
The petitioners are also seeking waiver of interest during the period when moratorium was granted by the banks on account of special rehabilitation/revival package for the persons affected by natural calamity-floods in the erstwhile State of J&K. “Rehabilitation package to borrowers hit by the disturbances that occurred in the erstwhile State of J&K in 2016 and 2019”, read the petition.
Court said, in essence the petitioners are seeking waiving of interest on all term loans for the period relating to natural calamity of 2014, disturbances of 2016 and 2019 and that of the present COVID-19 pandemic.
It is contended that although the decision on the part of the authorities, to grant moratorium is appreciable but by providing that the interest component shall continue to accrue on the outstanding portion of the term loan during the moratorium period would render the purpose of scheme/policy of the Government useless.
On March 27 RBI had permitted to grant a moratorium of three months on payment of installments. However, the repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. “Interest shall continue to accrue on the outstanding portion of the terms loans during the moratorium period”, read the scheme of RBI issued on March 27 this year.
Likewise the circular of January 3, 2020 issued by J&K Bank puts such kind of conditions on payment of term and interest as also the rehabilitation packages of 2016 and 2014 to those borrowers who hit by disturbances and natural calamity also puts such kind of conditions which, the petitioner says, are banned under the constitution of India and seeking quashing of these circulars to the extent of charging interest of loan amounts after the period of moratorium.
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